SEC Amends Accounting Guidance on Other-Than-Temporary Impairment


The SEC’s Office of the Chief Accountant and Division of Corporation Finance on Tuesday announced the release of Staff Accounting Bulletin (SAB) no. 111 that amends Topic 5.M. in the SEC’s Staff Accounting Bulletin Series titled Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities.

 

The release comes less than two weeks after FASB approved guidance on handling such impairments. Under FASB Staff Position (FSP) no. 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which was released April 9, once an other-than-temporary impairment is determined for a debt security, the portion of an asset write down attributed to credit losses may flow through earnings and the remaining portion may flow through other comprehensive income, depending on the situation and facts involved. The FSP did not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities.

 

SAB no. 111 maintains the SEC staff’s previous views related to equity securities and amends Topic 5.M. to exclude debt securities from its scope.

 

For a comprehensive list of news, feature articles and links to authoritative guidance on fair value accounting, click here.

 

SPONSORED QUIZ

How well do you know small business?

There are over 30 million small businesses in the U.S., and many of them are optimistic in their outlook. Are you familiar with the obstacles and opportunities they are facing? Test your small business acumen with this quiz sponsored by Chase Ink®.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income, the higher standard deduction, and the cap on the deductibility of state and local taxes.